General Area in Oceanside>Question Details

Heather Cane…, Other/Just Looking in Oceanside, CA

Is is it a good idea to rent a house that is in pre-forclosure? it's a month to month lease.

Asked by Heather Canett, Oceanside, CA Tue Jun 3, 2008

Help the community by answering this question:

Answers

4
If you are prepared to move out of the house without warning. Once the house becomes an REO which means the foreclosure process is complete and ownership has transferred back to the bank. This time frame varies with each property. The bank turns the property over to an asset managing company immediately. Somebody will contact you right away, and the eviction process starts simultaniously. Some banks will offer you cash for keys. Which means if you move out within 14-22 days you may receive a monetary reward for leaving and taking all your belongings, and leave the property in broom swept condition. This amount varies bank by bank, and depends on the price of the home. It can be anywhere from $500 and up. It depends how cooperative one is with moving. The faster you move the more money is usually offered. The cash for keys agreement is a signed agreement with you and the bank. If you do not follow it, there will be no money. This is the simple scenario and common. I have been involved with many. Cooperation is always best for everyone! Hope this helps.
0 votes Thank Flag Link Thu Jun 5, 2008
Heather:

Here are the pros:
(1) You might get a better rent.

Here are the cons:
(1) When the bank or new owner aquires the home at the end of the foreclosure period, you will need to move. (When was the notice of default filed? You have approx 111 days from that date.)
(2) While you are living there a lot of people will come knock on your door trying to find the owner, hoping to get a deal on the property or get the listing.
(3) Your mail box will be full of solicitations to the homeowner from mortgage companies, foreclosure companies and realtors.
(4) 21 days before the Trustee Sale, you will come home to a legal notice posted on your front door or gate (must be clearly visible from the street) telling you that the home will be sold on a date certain on the courthouse steps.
(5) The new owner (after the Trustee Sale) will not be holding your security deposit, so unless you can collect it from the guy who, by the way was not paying his mortgage, you can consider it a donation to the prior home owner.
(6) Oh, and if you get a phone number that is listed, you will get calls at all hours of the day and night from the same types of people who are knocking on your door and stuffing your mailbox.

There are probably more cons that I am not thinking of right now. So, unless you are doing this because it is a great home for the summer and you don't mind moving again, or you are helping out a friend, or you just can't find anything else to rent, I don't know why you would want to put yourself into this position.

Good luck on finding the perfect home to rent and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Wed Jun 4, 2008
As Heather mentioned it has a lot of negatives, but you can use that to your advantage to negotiate with the landlord a lower rental rate with the understanding you will probably have to move in a few months and your privacy might be compromised while living there.

The bank might actually benefit from you staying there as the value of the property will probably hold better with a home that is lived in instead of sitting vacant and falling into disrepair.
0 votes Thank Flag Link Tue Jun 3, 2008
I wouldn't recommend it. You don't have any kind of stability in such a situation. The seller may end up losing the home, and in such a case, if you don't have a lease, the new buyer can serve notice for you to vacate or evict you.

Why get caught in the middle of this bad situation. If it's in pre-foreclosure and is listed for sale, you'll have to deal with prospective buyers and their agents who would want to see the property. Your quiet enjoyment of your home will be disrupted by such showings. Who needs the aggravation?

For your own peace of mind, find a regular rental that is not in danger of being foreclosed.

Good luck.
0 votes Thank Flag Link Tue Jun 3, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer